How does a pawnshop work?

1.  You bring in something you own and give it to the pawnbroker as collateral for a loan (this act is called pawning).

2.  The pawnbroker loans you money against that collateral

3.  When you repay the loan plus the interest, you get your collateral back.

4.  If you don't repay the loan, the pawnbroker keeps the collateral.

What is the difference between buying at a pawnshop and buying at a retail store?

Mainly price. Pawnshops can offer you merchandise ranging from 1/3 to 1/2 off retail prices